MONTREAL — Lions Gate Entertainment Corp. of Vancouver has reported its first set of financial results since going public in November and the modest numbers are in line with what Lions Gate execs expected.
Lions Gate posted revenue of C$16 million ($11 million) for the three months ended Dec. 31, 1997, and net earnings for the three-month period were $162,000 or $0.01 per share.
The company also announced that it generated revenue of $27 million and net earnings of $4,200 from its inception on April 28 through Dec. 31.
The anemic results reflect the major acquisitions undertaken by Lions Gate last year and a large number of one-time costs related to the start-up of operations.
“They’re modest, but they reflect our expectations,” said Lions Gate Entertainment chief financial officer Gordon Lancaster. “We spent lots of money. We had lots of consultants and lots of lawyers. It’s not an indicative quarter and it’s not an indicative eight months. On a go-ahead basis, we hope to make the business larger.”
Lions Gate Entertainment Corp. is in the midst of negotiations to become the primary equity holder in Mandalay Entertainment, providing the Hollywood company with between $300 million and $400 million in cash and credit lines.
In June, 1997, Lions Gate acquired a 47.6% interest in Cinepix Film Properties and picked up the remaining 52.4% of the equity in Cinepix Film Properties in November.
Lions Gate paid $27 million for the film distributor and producer. Over the eight-month period, Cinepix Film Properties contributed $606,000 to Lions Gate’s earnings. In July, Lions Gate purchased a 100% interest in North Shore Studios, Vancouver’s largest film and TV studio, for $15 million. The company acquired Mandalay Television in November, for the pricetag of $4.2 million.
Cinepix Film Properties has been renamed Lions Gate Films. The Lions Gate division is setting up a global film-sales outfit, Lions Gate Intl., headed by former Rysher executive Joe Drake.